John Fredriksen has founded a new shipbroking joint venture, Arctic Shipping Norway, with Oslo-based Arctic Securities. The firm will be a 50/50 equal partnership between Arctic Securities and Fredriksen's family-owned Gerevan Trading, and suggests that Fredriksen is betting on a turnaround in the shipping economy.
"I am truly convinced that both the shipping and the offshore markets will recover. Establishing a new business during tough times is not new to us. Arctic Securities was established in 2007, a short time before the financial crisis," Arctic Securities chief executive Mads Syversen said.
The new firm will have six to eight employees, and Harald Thorstein of Fredriksen says that it will be a separate entity, with no support from Fredriksen's significant shipowning interests. “The new [firm] will not get any special treatment . . . when it comes to attracting business. You get nothing for free in this market, and one must work hard and be competitive. But with a team of young, hungry brokers and great support from Arctic Securities, we strongly believe that the new company will succeed,” Thorstein said.
The tough environment for shipping has resulted in cooperation and consolidation in the shipbroking world as companies hunt for scale.
In 2015, ICAP's shipping business completed a joint venture with rival shipbroker Howe Robinson, following Clarkson's acquisition of Norwegian broker RS Platou and Braemar Shipping Services' acquisition of ACM Shipping in 2014.
Fredriksen is among the world's top players in shipping, with many interests controlled via his Fredriksen Group, including rig firm Seadrill, tanker company Frontline and dry bulk carrier Golden Ocean.
Separately, on Tuesday, JP Morgan downgraded Golden Ocean's shares to “Underweight” from a prior rating of “Neutral.” Morgan Stanley made the same move in December. The firm’s quarterly earnings released in November were a loss, and well below analyst expectations.
Golden Ocean lists a fleet of 43 vessels as of January 26, including 20 capesize bulkers, the hardest-hit vessel class. The ships are relatively new, with the oldest built in 2008 and only six built before 2010.
Dry bulk's troubles continued Tuesday as the benchmark Baltic Dry Index made another fall to 345, the latest of more than a dozen record lows so far this year.